Protestors will deliver a giant “cease and desist” letter calling on GE to “stop dodging taxes while lobbying for cuts to Social Security” at GE’s Chicago headquarters, 500 W. Monroe, at 12 noon on Thursday, August 22. They will demonstrate outside Durbin’s office at 230 S. Dearborn at 12:40 p.m.

It’s part of a national week of action “outing” corporate tax dodgers across the country by Chicago-based National Peoples Action.

Tax-free profits

From 2002 to 2012, GE paid $2.1 billion in federal income taxes while earning $88 billion in profits — a tax rate of 2.4 percent, far below the official rate of 35 percent — according to Americans for Tax Fairness.

In four of those years GE reported $22.5 billion in profits but paid no taxes — and received $4.8 billion in tax rebates, according to the group.

GE’s shifting of jobs overseas came under criticism when President Obama appointed GE CEO Jeffrey Immelt to head his jobs council. Under Immelt, GE has shed 34,000 jobs in the U.S. while adding 25,000 overseas, according to HuffPost.

The Obama administration has previously backed “revenue neutral” corporate tax reform — eliminating loopholes but lowering the tax rate — but the president recently proposed using some new revenues to fund infrastructure and education.

As a leader of the Senate “Gang of Six,” Durbin supported an essentially revenue-neutral corporate tax reform scheme.

Such an approach makes little sense given federal budget needs, with corporate profits at all-time highs, while corporate taxes are now half what they were in 1960 as a proportion of profits or of GDP, according to Jared Bernstein of the Economic Policy Institute.

Congress will consider measures to fund the federal government for Fiscal Year 2014 in coming weeks — and after that must once again address the issue of raising the debt ceiling.

]]>Here we go againhttp://www.newstips.org/2013/02/here-we-go-again/
Wed, 27 Feb 2013 03:51:17 +0000http://www.newstips.org/?p=7000The Donors Forum is warning of “an immediate series of drastic cuts to community services,” along with the loss of thousands of jobs in Illinois, unless Congress acts this week to head off spending reductions contained in sequestration.

While sequestration is “framed as an impersonal budget deficit fix for the future,” the reality is “these cuts will damage people now,” said Delia Coleman, public policy director of the group, in an e-mail.

Sequestration would mean $33.4 million less for primary and secondary education in Illinois, $24.7 million less for children with disabilities, and millions of dollars in cuts to pollution prevention, health and human services, public safety and domestic violence programs.

***

The situation results from the political and economic miscalculations of President Obama, beginning with his embrace of deficit reduction as a priority in his first term, writes Robert Kuttner in American Prospect.

At stake, he writes, are the economic recovery and the success of Obama’s presidency.

“The automated reductions of the sequester are only the prologue to a decade-long drama, in which the economy faces one budget squeeze after another, all but guaranteeing a prolonged slump. Unless Congress repudiates the 2011 Budget Control Act, and President Obama blows up the entire paradigm that produced it, a fragile recovery will be the victim of budgetary masochism.”

“Though too few Democrats will come right out and say it, there is a far better path to both economic recovery and eventual stabilization of the debt ratio,” Kuttner writes. “We need to increase public spending in the next few years, using both deficit spending and higher taxes on the wealthy, to get the economy back on a high-growth path….

“With a program of economic expansion, we can reach a stable long-term debt ratio, but at a higher level of economic output and a more broadly shared prosperity. The goal is economic recovery – and the recovery improves the debt ratio, not the other way around.”

He cites the European experience as a cautionary tale — and notes that budget cuts sent the economy into contraction in the last quarter of last year:

“As the Greeks have painfully learned over and over again, you can cut spending and raise taxes, and the deficit just keeps growing larger — because you are destroying your economy. The same has been demonstrated for Spain, Portugal, and Britain. Something similar occurred on a more modest scale in the fourth quarter of 2012 right at home.”

***

“As pundits and the Washington establishment hone in on the sequester this week, what remains unfortunate in this picture is that there is still little willingness to talk realistically about the relationship between the economy and the budget deficit,” writes Dean Baker of the Center for Economic and Policy Research.

“Both parties have played into the myth that out-of-control budget deficits are a chief economic problem. Democrats have pushed this line to call attention to the Bush tax cuts and the fact that he did not pay for the wars in Iraq and Afghanistan. Republicans push the line to feed the notion that government is overspending….

“Rather than being a bad thing, the deficit is providing a needed boost to the economy. There is no plausible story whereby private-sector demand will fill the gap created by a smaller deficit.

“Whether they know it or not, those pushing for smaller deficits are promoting less growth and more unemployment. It would be the best possible outcome of the sequester debate if this simple point could be made in polite circles in Washington again.

“Until we have a reality based discussion of the budget and the economy, the only question will be how much we lose from the latest deal.”

Since Monday, a coalition of grassroots groups has been staging a soupline outside Durbin’s downtown office “to make visible the hunger and suffering that budget cuts will create,” according to a statement from IIRON.

All kinds of people are accepting the homemade soup being offered, and many are expressing surprise when they learn that Durbin is backing drastic safety net cuts, said Kristi Sanford of Northside POWER.

The long-term spending reductions Durbin is calling for — outlined in the Simpson-Bowles commission report he backed in 2010 – would be no better than the cuts required by “sequestration” if Congress fails to come up with a budget deal by the end of the year, Sanford said.

“They would push us back into recession, and we’d have more lost jobs and suffering,” she said. “It would cut education, food security, a whole range of government services we rely on.”

According to Sanford, in a series of meetings with coalition members this year, Durbin refused to back off his call for cuts to Social Security. But last month, after 19 protestors were arrested at his office, he seemed to relent slightly, saying Social Security cuts shouldn’t be part of a deal this year.

He’s still calling for deep cuts to Medicare and Medicaid, Sanford said, and he wants a commission to consider Social Security cuts next year.

The Simpson-Bowles report backed by Durbin called for reducing Social Security cost-of-living increases and raising the retirement age to 69. It relies on a formula that assumes seniors would substitute cheaper alternatives as prices for necessities rise — thus earning Simpson-Bowles the nickname of “the catfood commission.”

Raising the retirement age would penalize low-income workers, whose life expectancy has not been rising, Sanford said. (She suggested reading Paul Krugman’s analysis of this issue.)

If the federal government would restore pre-Bush era tax rates on the wealthy and institute a financial transaction tax – a small fee on sales of stocks and bonds, now being implemented in France and Germany, that could raise as much as $1.8 trillion over a decade – it could maintain the safety net and pay down the deficit, Sanford said.

At one meeting with the coalition, Durbin said he couldn’t back a financial transaction tax because it would impact the Chicago Mercantile Exchange, said Toby Chow of Southsiders Organized for Unity and Liberation. CME is one of Durbin’s largest contributors, Sanford said.

The shantytown and souplines are an effort to encourage Durbin to “look into the eyes of the people his budget decisions will affect, and remember that CEOs and Wall Street donors are not the only people with huge interests at stake in the budget negotiations,” Sanford said.

An error regarding the date of the Simpson-Bowles report has been corrected.

]]>http://www.newstips.org/2012/12/durbinville-dramatizes-safety-net-cuts/feed/3Fiscal cliff noteshttp://www.newstips.org/2012/11/fiscal-cliff-notes/
http://www.newstips.org/2012/11/fiscal-cliff-notes/#commentsWed, 14 Nov 2012 02:18:51 +0000http://www.newstips.org/?p=6747Nineteen protestors demanding Senator Richard Durbin oppose cuts to Social Security and other social programs as part of any deficit deal were arrested on Friday in his office and the lobby of the Federal Building, Kari Lydersen reports at In These Times. (See our previous post for more.)

***

The so-called “grand bargain” is a “grand swindle” which ignores the “victory for middle-class populism” that last week’s election represents, according to Roger Hickey of the Campaign for America’s Future.

“Within hours of the election, the austerity posse was fear-mongering around the so-called ‘fiscal cliff’ and pressuring Washington to accept a ‘grand bargain’ before the end of the year that would slash Social Security, Medicare and Medicaid – and plunge us into a double-dip recession.”

***

Durbin and other deficit hawks “are hoping that the hype around the budget standoff (aka ‘fiscal cliff’) can be used for a grand bargain that eviscerates the country’s two most important social programs, Social Security and Medicare,” writes Dean Baker of the Center for Economic and Policy Research, noting that “they made a point of keeping this plan out of election year politics.”

But they must act quickly, he points out – because “one of the pillars of their deficit horror story could be collapsing.

“Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high-level policy positions.”

***

At Tom Dispatch, Mattea Kramer and Chris Hellman of the National Priorities Project offer “Washingon’s Cliff Notes,” laying out the specifics of the manufactured crisis and urging us to “ignore the sound and fury” – it’s less a “fiscal cliff” than an “obstacle course.” They predict that Congress will kick “sequestration” down the road. They also predict that federal unemployment benefits will be allowed to lapse.

***

If you’re serious about deficit reduction, local activist Paul Buchelt has a bunch of numbers for you at Nation of Change – individual and small business tax avoidance, $450 billion a year; corporate tax avoidance, up to $500 billion; tax haven abuse, $337 billion or more – together it’s enough to pay off a trillion dollar deficit.

Want to save Social Security? Lifting the cap on payroll taxes gets you $150 billion a year. An estate tax on multi-millionaires is worth $100 billion, a financial transaction tax, like the one they’re instituting in Europe, $500 billion.

Now we’re looking at a nice surplus.

]]>http://www.newstips.org/2012/11/fiscal-cliff-notes/feed/2Challenge to Durbin: Don’t cut Social Securityhttp://www.newstips.org/2012/11/challenge-to-durbin-dont-cut-social-security/
http://www.newstips.org/2012/11/challenge-to-durbin-dont-cut-social-security/#commentsWed, 07 Nov 2012 23:24:00 +0000http://www.newstips.org/?p=6741Dozens of clergy members will carry a golden calf symbolizing the idols of wealth and greed to Senator Richard Durbin’s office on Thursday, as a coalition of community groups demands that Durbin defend social programs – including Social Security and Medicare – in any post-election budget showdown.

So far Durbin has refused to sign a pledge – backed by Majority Leader Harry Reid and 28 other senators – promising to oppose cuts to Social Security, Medicare, and Medicaid.

“Durbin is missing in action on this issue,” said Jacob Swenson of the Make Wall Street Pay coalition. The Illinois senator is assistant majority leader and the Obama administration’s closest ally in the Senate.

Led by the clerical procession, members of the coalition will march from the Chicago Temple, 77 W. Washington, to Durbin’s office in the Federal Building, 230 S. Dearborn, at 10 a.m. on Thursday, November 8.

On Friday at 3 p.m., hundreds of clergy, students and others will rally at Pritzker Park, Van Buren and State, calling on Durbin to stand tough in budget negotiations.

Hardball

Following the failure of Durbin’s “Gang of Six” to reach a budget compromise in the summer of 2011, Congress passed a measure establishing a supercommittee to breach the impasse, with the threat of $1.2 trillion in automatic “sequester” cuts to military and domestic spending if they failed. They failed, and the deadline to act under that measure looms.

Congress could just repeal sequestration and start over, Swenson said. The current impasse revolves around Democrats’ insistence on a mix of tax revenue and budget cuts to address the deficit, while Republicans oppose any tax increases whatsoever.

President Obama has to check his propensity for preemptive compromise and “play hardball,” said Swenson. Specifically, he said, Democrats can win if they are willing to allow the Bush tax cuts – all of them – to expire.

“We’d like to keep them in place for people earning under $250,000, but if you’re not willing to let them expire, you don’t have political leverage,” he said. “The Democrats haven’t taken the strong bargaining position they need to take.”

Durbin: raise retirement age

Obama has backed the recommendations of the Simpson-Bowles commission, which Durbin supported, including raising the retirement age to 69 and reducing cost of living adjustments for Social Security; the plan would also lower the tax rate on top incomes.

Swenson said that Durbin defends raising the retirement age because Americans on average are living longer, but he says that that’s true only for wealthier people; for blacks and Latinos, in fact, life expectancy is decreasing.

“When they talk about ‘restructuring’ and ‘strengthening’ Social Security, that’s code for cutting benefits,” he said.

That’s not necessary, he said: the Social Security fund could be bolstered by raising the income limit on payroll deductions. According to Swenson, Durbin has said he supports this in private meetings, but he hasn’t managed to take a position publicly.

Swenson also takes issue with Obama and Durbin’s focus on short-term deficit reduction. “This is not the time to be focusing on the national debt,” he said. “We’re in a depression. Our elected officials don’t seem to recognize what this means for people. We need to do whatever it takes – and borrow whatever it takes – to get the economy going.

“We were willing to go into debt for ten years to pay for two wars and for tax breaks for millionaires and billionaires,” he said. “Why can’t we make sure people in our communities have jobs, have food and medicine, that our children can get a decent education?”

The coalition is calling for blocking sequestration; Swenson says the cuts “would fall on the most vulnerable people – the poor, the sick, seniors and children.” They reject a “Grant Bargain” that balances the budget at the expense of the safety net. They’re calling for a financial transaction tax to raise hundreds of billions of dollars of new revenue.

]]>http://www.newstips.org/2012/11/challenge-to-durbin-dont-cut-social-security/feed/1Rally for ‘Jobs Not Cuts’http://www.newstips.org/2011/10/rally-for-jobs-not-cuts/
Wed, 19 Oct 2011 21:17:08 +0000http://www.newstips.org/?p=4845A new coalition challenging the federal government’s budget priorities will hold a town hall meeting with three members of Congress Thursday night, then adjourn to join Occupy Chicago outside the Bank of America at LaSalle and Jackson.

The town hall takes place at 6 p.m. on Thursday, October 20 at the Chicago Temple, 77 W. Washington, with a press conference at 5:30 p.m.

Move The Money Chicago, which includes scores of community, peace, and labor groups, calls for a massive jobs program funded by taxing the rich and ending overseas wars.

U.S. Reps. Danny Davis, Jesse Jackson Jr., and Jan Schakowsky will speak at the meeting, along with local residents spelling out concerns – a public school teacher, a victim of foreclosure, an unemployed worker, and others, said Terry Davis of MTM Chicago.

Schakowsky will speak about her Emergency Jobs Act, which would create 2.2 million jobs, including hundreds of thousands of jobs in school maintenance and repair, park improvement, weatherization, along with funding for more teachers, police, health care and child care workers, and student jobs. It would give priority to the long-term unemployed, who today face discrimination in their job searches.

It would be fully funded by Schakowsky’s Fairness In Taxation Act, which would raise the income tax rate on millionaires to 45 percent and on billionaires to 49 percent. That’s lower than the top rate under President Reagan, she points out. Currently billionaires pay the same rate as anyone making over $373,000 a year.

A range of housing programs face significant reductions – but the $88 million housing counseling program is one of the only ones being zeroed out entirely, said Bob Palmer of Housing Action Illinois.

The deal would eliminate a basic source of funding for the nonprofit agencies which assist troubled homeowners – in the midst of a continuing foreclosure crisis of historic proportions. A vote is expected in Congress this week.

“It’s completely misguided in the face of the foreclosure crisis,” Palmer said. “It looks like partisan politics has trumped making good funding decisions.”

Agencies will close, foreclosures will rise

He said agencies he’s heard from today uniformly say they would have to lay off staff and reduce services – and a number of agencies say they would be forced to close.

The elimination of funding will certainly mean an increase in foreclosures which could have been prevented, he said.

Studies have shown that homeowners facing foreclosure with assistance from housing counselors are far more likely to work out a settlement where they keep their homes.

[Woodstock Institute “strongly opposes zeroing out funds for HUD-funded housing counseling assistance,” said Tom Feltner in a statement. Feltner noted research by Woodstock and Housing Action that found gaps in counseling resources in areas of the Chicago region facing notable increases in foreclosures. He said agencies “will likely have to close their doors or sharply decrease their operations in the absence of HUD funding.”

“At a time when foreclosures continue to rise and communities are devastated by vacant homes, family instability and loss of home equity, we simply can’t afford to cut funds for housing counselors working on the front lines to keep families in their homes whever possible and create educated, responsible homeowners,” Feltner said.]

Another major source of funding for RPCDC comes from federal community development block grants administered by the city – and that program would be cut by $640 million under the budget deal.

Hundreds of cases

Like many such agencies, RPCDC has traditionally focused on homebuyer counseling, but in the past three years has seen its caseload shift dramatically to foreclosure prevention counseling.

The agency has been taking on hundreds of foreclosure cases each year since about 2009, Hain said, and each case can take two years to be settled – with each client requiring considerable individual attention.

“These cases are not neat and tidy,” she said. “People are losing jobs. And a lot of it has to do with banks not being responsive.”

Another potential source of funding for foreclosure prevention is under consideration in Springfield. HB 1810 would assess a $500 fee for a foreclosure sale, with funds supporting housing counseling, borrower outreach, free legal assistance and court-based mediation.

It would also give an incentive to banks to work out troubled mortgages rather than foreclosing on them.

The bill has passed the House housing committee but faces significant opposition from the financial industry, Palmer said.

]]>Bank of America: ‘pay your taxes’http://www.newstips.org/2011/04/bank-of-america-pay-your-taxes/
Tue, 12 Apr 2011 17:29:29 +0000http://www.newstips.org/?p=3623Community activists will deliver a message to Bank of America today, and another one to Senator Mark Kirk.

Members of ten community groups, under the umbrellas of the Chicago Housing Initiative and the Illinois Indiana Regional Organizing Network, will march on Bank of America (135 S. LaSalle) at 4 p.m. today demanding that they stop evading taxes.

Then they’ll head to Kirk’s office (230 S. Dearborn) to call on him to stand against cuts to services for low-income families until major corporations pay their share of taxes.

Chicago Housing Initiative maintains that Bank of America evaded a $3.8 billion tax bill this year using “accounting tricks and offshore tax havens” – reducing the bank’s stated earnings and actually netting it a $666 million tax rebate.

“That $3.8 billion in lost revenue could single-handedly prevent all the cuts to Head Start, LIHEAP, community health centers, and housing for the elderly, people with disabilities, and homeless veterans under consideration in the Senate currently,” according to the group.

“Our message to Kirk is that until big banks and corporations start paying their share of taxes, cuts to services for low-income families shouldn’t be on the table,” said organizer Leah Levinger. “It’s inhumane – and it doesn’t do anything significant to shore up the budget.”